Hubbert Peak Theory

1. Hubbert Peak Theory Chelsea Fufaro, Brianna Wallace, Ray Sites

2. Intro • Marion King Hubbert (October 5, 1903 – October 11, 1989) was a geoscientist who worked at the Shell research lab in Houston, Texas. He made several important contributions to geology, geophysics, and petroleum geology, most notably the Hubbert Curve and Hubbert peak theory • Peak oil is the point in time when the maximum rate of petroleum extraction is reached, after which the rate of production is expected to enter terminal decline. Global production of oil fell from a high point in 2005 at 74 mb/d, but has since rebounded setting new records in both 2011 and 2012. There is active debate as to when global peak oil will occur, how to measure peak oil, and whether peak oil production will be supply or demand driven. • http://en.wikipedia.org/wiki/M._King_Hubbert • http://en.wikipedia.org/wiki/Peak_oil_theory

3. Objectives • Discuss: • evidence surrounding theory • what will happen if petroleum peaks • the U.S. preparation for peak oil • the public’s awareness of peak oil

4. What evidence supports the Hubbert peak theory? • Petroleum is a naturally occurring, complex mixture found beneath the earth's surface and obtained mostly by oil drilling. The issue addressed in peak theory is about us no longer being able to obtain it. • Since it is used in such mass quantities world wide (about 90 million barrels a day) it is a major concern that, in the near future, we will lack the resources necessary to extract oil. • While there is an active search for alternative energy sources, it is important that we have an estimate of the time we have left with petroleum. The Hubbert peak theory provides us with such an estimate, and has proven to be mostly accurate multiple times since Hubbert's prediction in 1956. • http://en.wikipedia.org/wiki/Petroleum • http://en.wikipedia.org/wiki/Hubbert_peak_theory#Criticisms_of_peak_oil

7. Does everybody agree with that evidence?  If not, explain. • The issues with obtaining oil are above ground and are to be found in the availability of staff, expertise, technology, investment security, and money. Some also say that the recent high prices of gas might also add to a future demise of the oil industry. To some however, these topics are currently less of a concern. They feel there is still a large amount of oil that can be extracted using conventional methods. While that is true in some regard, that amount is growing smaller every day. • http://en.wikipedia.org/wiki/Hubbert_peak_theory#Criticisms_of_peak_oil • http://en.wikipedia.org/wiki/Peak_oil#Criticisms

8. The Impact and Supply • If petroleum production does peak the impact would be: • Inflation • Higher gas prices • Higher energy prices • Higher costs through the economy • Global Recessions • If petroleum production does peak, it will not run out immediately. There will just be an end to cheap oil. • http://www.resilience.org/primer

9. Agreements • If petroleum production does peak, the agreements that experts have vary • Some experts believe that there will be a post –peak production decline and a global economy implication and oil increase. • Optimistic experts believe that production will occur after 2020 • From 2007 on, pessimistic experts believe that production the oil had already occurred or that oil production will occur shortly. • http://en.wikipedia.org/wiki/Peak_oil

10. Peak Oil • Peak Oil Defined – the point in time when global production of oil reaches its maximum rate, after which production will decline greatly. • US borrows $1 billion per day to pay for US oil consumption • During 1990, there was a large increase of consumption of coal, natural gas, and oil. • Increasing Resource Consumption: • Coal: 2.2% per year. • Natural Gas: 2.1% per year in all sectors (residential, industrial, electric companies) but had remained constant over the past 10 years. • Petroleum consumption increased due to increases in transportation (more car, more miles driven, no increases in fuel economy). • Fuel economy has actually decreased 6% due to an increase of SUV and light truck sales. -resulted in a 22% increase in total gasoline consumption between 1990 and 2005.

11. How Prepared is the U.S. for a peak in Production? • As the industry exhausts old reserves, the industry tries to keep inventory up by adding new reserves. • The addition of these new reserves historically have not been able to meet demand in the US and since 1962 until now, we have not been able to replenish the domestic oil consumed in any particular year with the discovery of new reserves. • World demand for oil continues to increase. • The US produces more oil than any country except Saudi Arabia and Russia despite the fact that U.S. had less than 2% of the world’s known oil reserves which is only enough to last approximately 4 years if used at current rates. • Fossil fuels are projected to constitute the majority of our energy supplies well into the 21st century, but estimates of the amount of a resource thought to exist are always tenuous, especially for petroleum. • Petroleum supplies 38% of the world’s energy needs today. -Hubbert curve suggests that by the middle of the 21st century, oil production will be only 10% of present levels.

12. Is the Public Educated? • Common Public Misconception: Peak oil DOES NOT mean we are running out of oil • Regional or National production is maintained or increased by adding production from new fields, not existing oil fields. • When production from a large number of fields has peaked and begun to decline, and there are not enough large new fields being found and developed to offset the lost production, the system is said to have peaked. • Although, oil is a non-renewable resource and as a limited resource it is only inevitable that the ability to extract this resource will peak and begin to decline.

13. Sources • http://www.oregon.gov/DAS/LO/docs/portlandpotfoverview_lomar09.pdf